By DAVID EINHORN

From humble beginnings as a small shop producing for the local market, this innovative Costa Rican manufacturer of hardwood doors has grown into a $20 million per year export powerhouse with 700 employees. And it has done so while becoming one of the first tropical wood companies anywhere to obtain an independently certified "green seal" for environmentally sound forest management.

Portico's story began in 1983 when current chief executive Leopoldo Torres Barrera and several associates bought a small local door manufacturer with a view to exporting high-quality doors to the United States. Through a trade-promotion program supported by the U.S. Agency for International Development, Torres and his partners visited numerous U.S. trade shows to learn about product specifications and styles.

"Those trips showed us that our product was not right for the U.S.," Torres recalled during an interview at his plant in San José. So the first thing Portico did was to overhaul its entire production process to meet U.S. quality standards and size specifications. "It took years of effort for us to be able to compete at an international level, to find our niche, cultivate relations with the large chains, and try to understand their needs," he adds. "It goes far beyond just selling the products."

The company's start-up years were made all the more challenging because it aimed for the high end of the market, building solid, fully assembled doors from carapa, a durable tropical hardwood in the mahogany family. The doors, which are available in dozens of styles with beveled glass windows, are meticulously crafted and carry a 10-year warranty. Though the early years were tough, Portico's continual focus on quality eventually won it the loyalty of leading U.S. retailers such as Home Depot and Lowe's, and a number of national distributors. Today, marketed under the name of its U.S. subsidiary, Royal Mahogany Products, the company sells 80,000 doors a year and supplies a substantial percentage of all the solid mahogany doors sold in the United States.

Portico's success is even more impressive in light of its unusual commitment to sustainable forestry. In its early days the company purchased raw logs from independent loggers on the open market. But as national forest resources dwindled by the mid-1980s, the company decided to begin purchasing its own land and to implement a forest management plan based on selective logging, natural regeneration, sustainable yields, stability of the ecosystem and conservation of flora and fauna.

In 1993, Portico became one of a handful of tropical wood product companies worldwide that voluntarily submits to independent certification of sustainable forestry practices. Sustainable forestry involves extracting wood in a way that assures that the forest can regenerate without planting more trees. The largest and oldest trees are cut so that their fall doesn't damage other trees, and their removal from the forest is done in such a way that tractors cause minimal damage to surrounding vegetation.

Portico hired Scientific Certification Systems (SCS), an independent environmental inspection firm based in Oakland, California, to conduct a thorough audit of harvesting operations on its 6,000 hectares of forest. SCS is accredited to conduct such inspections by the Forest Stewardship Council, an international organization formed by leading environmental groups and industry representatives to promote sustainable forest management. The council's criteria for certification, which measure both environmental impacts and benefits to the local community, are considered extremely rigorous and have won endorsements from the world's leading environmental groups.

Portico spent around $60,000 to fly in and host SCS inspectors in 1993, and each year since then it has paid for follow-up inspection visits necessary to maintain its certification. "We see it as an investment in the future," Torres said of the cost of certification. "It is a way of showing our clients and our local partners that we aren't harming local forests. On the contrary, we want to be a factor in preserving that resource." Portico was also the first company to receive an award from the Tropical Forest Foundation, a Washington, D.C.-based institution that promotes low-impact logging.

Though Portico has received accolades for its environmental policies, Torres is quick to point out that certification has not yet given the company a meaningful marketing advantage over noncertified competitors. "I don't think anyone is going to buy a door they don't like or that isn't well made simply because it has a green seal. Wholesalers and consumers are interested more in the design, the price, the quality and the service. All things being equal, certification that the product is environmentally friendly might sway someone's decisions, " he says.

In 1993, to reduce the need for carapa, Portico also switched to veneer operations, a process that makes it possible to use wood more efficiently. Production and sales dipped while the company incorporated the new technology, but by the end of the following year Portico was back on its feet.

Portico must still buy between 25 percent and 50 percent of its wood on the open market in order to keep up with demand, according to Torres. However, the company insists on buying from loggers who have valid permits that are issued only to companies that comply with Costa Rican government logging regulations.

With the goal of decreasing its reliance on wood from outside suppliers, Portico has also continued to buy land. In 1995, the company expanded its holdings with a $200,000 loan from what today is known as the Corporación Financiera Ambiental (CFA), a venture capital fund based in San José that invests exclusively in small environmental companies in Central America. CFA is administered by the Environmental Enterprises Assistance Fund, a Washington-based nongovernmental organization, and has received $4.85 million in equity financing from the IDB's Multilateral Investment Fund. Most recently, Portico announced a joint venture with Premdor, a Canadian multinational that is one of the world's largest door manufacturers. The agreement will allow Portico to increase its forest holdings, expand its production, and sell through Premdor's global distribution network.

"Ten years ago the issue was whether forests could even be managed sustainably," says Torres. "Would the cash flow allow dividends? Was it technically and financially feasible?," explains Torres. "Today we are viable in all of those areas."